Location: Neutral Bay NSW
Posts: 275
Car: 1990 W124 300CE-24
'92 W124 300E (M104). Wiring loom insulation is doing the biodegradable thing - the outer sheath has turned to crumbly powder. Documenting the remediation walkthrough with photos for anyone facing the same problem.

Symptoms before remediation: random misfires under load, check engine light intermittent, AC clutch dropping out at random, RPM fluctuating at idle. Cause: the cloth-jacket portion of the M104 engine wiring loom (Mercedes-Benz part 124 540 27 32) is made of a 1990-1996 era biodegradable cotton compound that disintegrates after 30 years.
Remediation: full loom replacement is $1,840 from MB Australia. DIY wrap with new heat-shrink + butyl tape is $95 and works for another 20 years. I did the DIY route. Photos attached.